There are a lot of options for Australian investors to choose from.
So, if you're struggling to know which ASX shares to buy, don't worry.
Because the team at Morgans has just given its verdict on three popular shares.
Does it rate them as buys, holds, or sells? Let's find out.
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Liontown Ltd (ASX: LTR)
Morgans remains relatively positive on this lithium miner despite its softer than expected first-quarter update.
In response, the broker has retained its accumulate rating with an 82 cents price target. This compares to the latest Liontown share price of 58.5 cents. It said:
A soft 1Q27, with production of 78.0kt missing MorgansF/consensus by 18%/20% as depleted stockpiles cut throughput and recoveries fell to 60%. Revenue beat on a concentrate inventory drawdown. FY27 guidance now hinges on a step-up from 2Q27 as underground mining and recoveries improve. Softer spot prices and peak capex keep FCF negative through FY27. Maintain ACCUMULATE with A$0.82ps target price.
I think Morgans makes some fair points. If you're looking for lithium exposure, it could be worth considering. But you need to understand the risks.
Suncorp Group Ltd (ASX: SUN)
The shares of insurance giant Suncorp could be close to being fully valued according to Morgans.
Although there were positives from its investor day update, it wasn't enough to change its rating. Morgans continues to rate Suncorp shares as a hold with a slightly improved price target of $20.13. This is only modestly higher than its current share price of $19.56. It commented:
SUN has hosted its investor day, which we found constructive. It confirmed SUN has moved into the third phase of its transformation, leveraging its capabilities to drive profitable growth, with four key levers identified: Vero Specialty, loss ratio improvement, New Zealand (NZ) and platform/AI. As part of the update, SUN trimmed FY27 top-line growth guidance to 3% (from 3-5%). Flowing this through, we reduce FY27F/FY28F EPS by 1%.
Our target price rises marginally to A$20.13 (previously A$20) with our earnings changes offset by a valuation roll-forward. SUN's transition to a pure-play general insurer has been well executed. However, with limited upside to our target price (~4%), we maintain our HOLD rating.
This is probably a fair call from Morgans. Suncorp shares appear around fair value at 17x Morgans' FY 2027 earnings estimates.
Wesfarmers Ltd (ASX: WES)
Morgans has been looking at Bunnings and Kmart owner Wesfarmers following its annual general meeting.
It highlights that the company's trading update was a touch weaker than it was expecting.
Nevertheless, it remains positive enough to maintain an accumulate rating with a trimmed price target of $82.50. This compares to the current Wesfarmers share price of $77.19. It explains:
WES's AGM trading update overall was slightly weaker than expected. While sales growth for the retail divisions in FY27 YTD was largely in line with expectations, the exit run rate was marginally softer. Management noted that despite a stronger start to the quarter at Bunnings, lower sales across seasonal categories and the commercial segment in recent weeks have weighed on overall sales performance. We reduce FY27-29F group underlying EBIT by 1% and underlying NPAT by 2%.
Our target price declines to $82.50 (from $85.00) and we maintain our ACCUMULATE rating. While the consumer backdrop is softening amid higher interest rates, weaker housing conditions and declining consumer sentiment, we believe WES's retail businesses (Bunnings, Kmart Group, Officeworks and Priceline) remain well positioned given their strong value propositions. Combined with ongoing productivity initiatives, this should leave the company well placed to deliver stronger earnings growth when economic conditions improve.
I would agree with Morgans on Wesfarmers. It trades at a premium of 32x Morgans' FY 2027 earnings estimate, but it could be a good long-term option for investors due to its strong brands and defensive qualities.
